Russian PR Firm Exposes Media Corruption

the head of the St. Petersburg office of Promarco, a public relations firm with offices in Finland and the former Soviet Union, held a press conference at which he exposed the practice of “pay for PR” and in the words of The Moscow Times “dropped a bombsh

MOSCOW, March 5—In developing countries around the world, journalists demand bribes to ensure that the news contained in company press releases finds its way into their columns, and in most cases, public relations practitioners are willing to pay. The whole sordid business is an open secret—reporters get paid; PR people get their stories covered; readers assume the news they receive is bought and paid for; and the legal system looks the other way.

But on Monday of last week, the head of the St. Petersburg office of Promarco, a public relations firm with offices in Finland and the former Soviet Union, held a press conference at which he exposed the practice of “zakazukha” as it is known in Russia and in the words of The Moscow Times “dropped a bombshell on the Moscow media community.”

Kirill Smirnov revealed that his firm, an affiliate of international public relations agency Manning Selvage & Lee, had conducted a sting operation, distributing a fictitious press release for a fictitious company and then making a record of all the newspapers that demanded payment before publishing the story. Among those stung were some of the most prestigious newspapers in the Russian capital.

“We did not want to frame the publications or quarrel with them,” Smirnov told reporters and fellow PR executives at the news conference. “We want to stop the routine violation of the law on advertising.” Under Russian law, paid advertisements must be identified as such, although the identification may be as minimal as a box separating ads from editorial content.

Whatever his intentions, it is clear that Smirnov has not made many friends in either the PR or the journalistic community in Moscow.

According to a lengthy article in The Moscow Times, the editor of Isvestia’s media page, Pavel Bardin, accused Promaco of carrying out “black PR” in order to undermine its competition. Another attendee at the press conference called out that “like a lousy A-student, you tattletale to the teacher,” while another yelled that Promaco had “framed all your colleagues from the PR industry.”

Noviye Izvestia editor Igor Golembiovsky said Promaco’s action was a “cheap provocation’ and predicted that the stunt would mean the end of the firm’s business in Moscow. “No one is going to deal with them anymore.” Golembiovsky insisted his paper had done nothing illegal because the transaction was on the books and the relevant taxes were paid. He dismissed the idea that the publication was guilty of misleading its readers.

“Our reputation is not going to suffer a tiny bit," he told The Moscow Times.

Smirnov said that when Promarco began to work in the Moscow market, it came under pressure from newspapers and from its clients to do what other firms were doing, pay for placement. When the agency attempted to explain that paying for placement undermines the very commodity that PR delivers—credibility—it was rebuffed.

“Our clients were telling us: Unlike you, your competition can guarantee us a certain number of publications in certain newspapers,” said Rania Ibatullina, director of the agency’s Moscow office.

Rather than buckle under to demands that it join the corruption, the agency came up with a project it called “An Investigation Into Black PR.” It invented a fictitious company, DG-Tsentr, and issues a release to 21 publications announcing plans to open a $1.5 million store called Svetofor that would sell electronics equipment.

One newspaper, Klient, considered the story newsworthy enough to run for free. Several magazines and one newspaper called for further information. And newspapers Izvestia and Segodnya said they were ready to run the information marked as advertising. But 13 newspapers and magazines—including the government newspaper Rossiiskaya Gazeta and Isvestia—referred the PR firm to their commercial departments and initiated negotiations to run the story as a news item, in exchange for payments ranging from $135 to $2,000.

Promarco admits that it broke the law by distributing false information, but says it is willing to pay any fine as long as the Anti-Monopoly Ministry, which regulates advertising and the media, also takes action against the newspapers that accepted payment.

At least some publications were contrite. Nezavisimaya Gazeta editors said they regretted the newspaper’s decision and promised that the journalists involved would be punished. But they claimed that PR and advertising agencies were partially responsible for the practice of zakazukha because of their reluctance to run formal advertising.

The strongest support for Promaco came from Sergei Yakovenko, general secretary of the Russian Union of Journalists.

“Today, it is impossible to place positive information about a political or economic subject for free,” said Yakovenko in a statement. “Public trust in the media is at the bottom. Attempts to introduce restrictive amendments to the law on mass media is not just the idiocy of legislators, but society’s response to the actions of journalists .”